market overview in the first quarter of 2021

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Bitcoin continues to update its all-time high and drags the entire cryptocurrency market with it, whose capitalization is gradually approaching $2 trillion. First quarter main event overview – in traditional Bloomchain research.

Read or download Bloomchain study “Cryptocurrency market in Q1 2021”

Market capitalization

The cryptocurrency market has grown for the fourth straight quarter. In the first three months of 2021, its capitalization grew almost one and a half times – from $720 billion to $1.74 trillion.

The main driver of market growth remains bitcoin, whose value has updated its historical maximum in March, reaching the figure of $ 60 thousand. At the same time, since the beginning of the year, the share of the world’s largest cryptocurrency in total capitalization has decreased from 67% to 60%.

Ethereum retains second place with 11.2% share, Binance Coin rises to third, Tether drops to fourth place. At the end of the quarter, the share of the three and ten largest cryptocurrencies in total market cap fell to 74% and 84%, respectively.

Eight new coins made it into the 30 largest cryptocurrencies in terms of capitalization at the end of the first quarter, including Uniswap and Aave – the tokens of the major DeFi projects.

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Profitability

Choosing a buy and hold strategy when buying the five largest cryptocurrencies in general can be beneficial for investors. By the end of the first quarter of 2021, the value of each has increased – the average ROI for the top 5 cryptocurrencies exceeds 350%. The biggest growth is shown by Binance Coin – every $100 invested in it can generate a profit of $730.

Bloomchain Research

In general, the value of the ten largest cryptocurrencies in the world in February increased by 95%, in March – by another 55%. The only token among them, which fell in price in the last winter month, is XRP – down 15%. This could be due to the SEC lawsuit and the proceedings surrounding the Ripple company. At the same time, at the end of March, the cost of this token increased by 32.7% at once.

Read also: Ripple Receives Lawsuit From US Securities and Exchange Commission

Bitcoin: spreads and correlation with other assets

According to the results of the first three months, the spread between the maximum and minimum bitcoin prices ($61,684 and $28,723) exceeded $30K and became the maximum in its history.

Bloomchain Research

By the end of the first quarter of 2021, the correlation between bitcoin’s daily returns and traditional assets turned out to be close to zero (the indicator for each of the 11 assets turned out to be below 0.2), indicating that there is no relationship between bitcoin’s movement and market benchmarks. traditional.

At the same time, the correlation between quotes of the same asset at the end of the quarter is significantly higher (the indicator for five of the 11 assets is higher than 0.7). There is no economic justification for such a relationship, so an incorrect correlation can be assumed. You can read more about the relationship between these indicators in our research.

Bloomchain Research

Miner’s income

The average daily earnings of miners on the bitcoin network in the first quarter of 2021 ranged from $25 to $55 million. These figures are significantly higher than the previous quarter’s indicators, where it was from $10 to $30 million.

The average commission per transaction on the bitcoin network for the period January to March almost tripled – from $ 5.9 to $ 16.54. A similar figure for the Ethereum network increased even more – almost sevenfold, from $2.2 to $14.93. At the same time, the size of the commission as a percentage of the transaction amount for bitcoin increased by 20%, and for Ethereum – twice. Most of the increase in average commissions in absolute terms can be attributed to the increase in the value of the cryptocurrency.

Bloomchain Research

According to the results of the first quarter of 2021, the share of commission earnings of miners on the bitcoin network amounted to 11% of their total remuneration, which amounted to more than $4 billion for the reporting period. higher than the end of 2020.

Over the same period of time, the same indicator on the Ethereum network amounted to 52% at once – compared to the previous year, it grew by 24 pp at a time.

Read also: Ethereum Generous Commissions – Bug or Scam?

Crypto wallet

At the end of the quarter, the average monthly number of active wallets in which the supply of bitcoin cash was held increased from 1.06 to 1.1 million, their share of around 70%.

Bloomchain Research

Between January and March, the number of largest BTC wallets owned by cryptocurrency exchanges nearly doubled – from 9 to 17. Five of them belonged to Okex, four belonged to Binance, two belonged to Kraken, one each was owned by Huobi, Bitfinex, Bittrex, CoinCheck, BITMEX and Poloniex.

The largest wallet is now owned not by Huobi, but by Binance – at the time of publication of the material, its balance was $9.6 billion.

DeFi Market

At the end of the first quarter of 2021, the volume of funds blocked in decentralized financial markets (DeFi) reached a record $44.28 billion. For the period January to March, this figure increased 188% at once compared to the previous quarter.

At the end of the quarter, the landing platform Maker remained the leader in this market segment – the volume of blocked funds in it amounted to $7.45 billion, Compound rose to second from fourth, Aave fell to third from second. These two projects are direct competitors of Maker.

The largest share of funds in DeFi services is still accounted for by loans – accounting for 48% of the total market. Decentralized exchanges (35%) and derivatives (5%) followed.

Read also: how the DeFi market can affect bitcoin withdrawals from exchanges

Bloomchain Research

NFT

The beginning of 2021 was marked by an explosive growth in the trading volume of NFT (non-fungible tokens). In the January to March period, it exceeded $2 billion, which is 2053% higher than the last quarter’s results. The two largest segments – collecting and arts – accounted for 48% and 43% of the total NFT trading volume, respectively.

Bloomchain Research

Read also: how the NFT market works

ICOs and IEOs

In the period January to March 2021, the volume of funds raised through ICOs and IEOs exceeded $300 million, which is 40% higher than the previous quarter.

In total, from 2013 to 2021, $33.9 billion was withdrawn through ICOs and IEOs. Lately, the volume of these funds has decreased significantly – since the beginning of 2020, it has amounted to only $ 1 billion, which is less than 3% of the total amount raised over the past eight years …

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